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Sell a Domain a Day and Make $75k

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I posted a sample sales email to an end user that I’ve used successfully in the past, and I am sure a few people thought my $400 price was probably too low. “Hey – you’re selling a domain name to an end user – an attorney no less. You should charge them more money!” Yeah, perhaps the people who say this are right, but below is a little perspective.

Say you buy a name like this every day, five days a week for $100 each. At the same time, every day, five days a week, you sell one similar domain name for $400. Each domain name you sell will yield $300 in profit (minus taxes of course). At the end of a year, not including 104 weekend days that you don’t sell a domain name, you would make $78,300 in profit.

This might not be a lot of money to everyone, but it sure would be a great revenue stream to have. Sure, there will always be names that won’t sell, but if you can focus on selling one targeted geographic keyword domain name, or a category defining domain name in a small industry, you can make some real money if you do this consistently – maybe even more than $300 on some of the names.

The key thing is knowing what’s a valuable name and what isn’t valuable. If you are just guessing, you will likely lose money. The smart thing to do is really do your homework. Research what other domain names professionals in those industries use for their websites, like cityAttorney.com for example, and buy similar names as they come on the market. This will give you the biggest clues about the buying habits of others.

***Update***

This is more theory than practice. I haven’t done this exact thing, but did similar sales when I started in the domain industry several years ago. I’ve also had luck recently selling names for good profit margins similar to what I outlined above. There are also some interesting comments to consider below.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (17)

    theoretical

    That would imply finding, buying and, even if only temporarily, owning a minimum of 270 good names each year. Why not put the effort you would have put into sales into building them out instead so that you can then retire off their largely passive income? At 270 names, that’s just a little over $1 per site per day in order to make the same as if you sold one name a day. If they were passively generating income you could hold out for and even demand higher offers, too.

    June 27th, 2009 at 10:42 am

      Elliot

      @theoretical

      I think it’s easier for most domain investors to buy and flip names than to develop them in mass. If the investor doesn’t spend the time developing on his own (takes me 3-4 hours to do a site like TobagoVacations.com, which is making $1-2/day now), the upfront costs would be very high in mass.

      Personally, I am doing both development as well as buying/selling quickly.

      June 27th, 2009 at 10:45 am

    Michael Carter

    someone would break even w/ a 25% sell thru which is still ambitious – it’s very difficult to make any money flipping names – your example is near impossible to accomplish.

    100 price/name
    250 # of biz days/yr (est)
    25,000.00 total cost

    62.5 25% sell thru
    400 sale price/name
    25,000.00 total proceeds

    June 27th, 2009 at 1:10 pm

      Elliot

      @Michael

      ” it’s very difficult to make any money flipping names”

      I disagree with you on this (well, almost everything you post it seems that we disagree). Although my blog and developed websites are making decent money these days, I still make a majority of money flipping domain names. Sure, most of my revenue (and profit) comes from the sale of high value domain names, but I have done what I stated above and made money. The seller can also adjust his price based on sales rate.

      Also, IMO, a majority of the people reading my blog will opt to register new names for <$10 and try to sell for $400+/-, which makes the necessary sales rate much lower. There are still plenty of good geographic keyword domain names available to register.

      June 27th, 2009 at 1:17 pm

    Lukas

    Holding a domain for less than 1 year would cost you a hefty 30%+ in income tax; holding it for more than a year it’d only be 15% in capital gains. Furthermore, to sustain such a selling rate means that you’re actively working on selling the domains you’ve acquired, to a different audience than your source of purchase, or that you’ve somehow created the ultimate goose that lays golden eggs. It’d be much more accurate to indicate that the overall profit over the course of a year would add up to the targeted amount ($75k) – which is not a realistic figure made solely by flipping domains as if they are goods that you can magically resell week after week. Unless you’ve personally succeeded in total sales of 250 domains per year at $300 net a piece, I don’t see how this “tutorial” holds any water, but it surely holds a spot in domain name fiction.

    June 27th, 2009 at 6:42 pm

    Elliot

    @Lukas

    First things first…. If you are selling domain names quickly, they are generally considered inventory in the US tax code, and long term capital gains taxes (lower tax rate) cannot be taken even if you wait for a year. Long term capital gains taxes can be taken on assets but I have been told I can’t consider domains I intend to flip as assets.

    Secondly, I primarily sell high value names rather than using this method. However, as I said in a comment above, most people will probably attempt to do this with reg fee names, as there aren’t many people who would sell a $99 drop catch for just $400. I have been successful at this, and I’ve found the only way to make this profitable is to scale.

    Most people who buy $99 names to flip try to sell them for far more than $1,000.

    Lastly, while I haven’t tried to do what I stated above, a few years ago when I first started in the industry, I bought and sold many names at 3-5x the purchase price (on average). I didn’t target end users as much when I originally started though.

    June 27th, 2009 at 6:54 pm

    stevie

    I tried your sample letter and sent to end users my domain names that are excellent but none reply me, looks like it don’t work.

    June 28th, 2009 at 1:40 am

      Elliot

      @Stevie

      Why not share a couple of your excellent domain names.

      More important than the email is the domain name and your target audience. You could try to sell Candy.com for $100,000, but if you send the inquiry to the wrong person, you won’t sell it for even a fraction of the value.

      June 28th, 2009 at 7:55 am

    Stephen Douglas

    El-Silver, your calculations are spot on, and really, if domainers sold at very low prices to induce the sale, but still make a 1000% profit, most domains could make $10,000 a month in profits and more for the seller (depending on the amount of domains and quality)

    I have followed a similar plan as you described, and it works. Just make the sale if your profit will be at least 10 times your investment, unless you are POSITIVE the domain in question will at some point make five+ figures. We can all easily mark which domains in our portf will do this.

    For an example and a chance for big El to make 10% commission, I’m wrapping up my final “attorney” domain niche, and am looking for a bulk buyer. However, I have the below attorney/legal domains cherrypicked priced too. But buy in bulk, get killer deals.

    So let’s make El Silver and me some gold — check out my list:

    DomainIndustryAttorney.com – $999
    DomainLawServices.com – $299
    DomainIndustryAttorneys.com – $299
    DomainIndustryLawyer.com – $999
    DomainIndustryLawyers.com – $299
    LasVegasDivorce.org – $299
    WyomingLaw.org – $299

    SANDIEGOATTORNEY.ORG – $199
    CRIMINALLAWATTORNEY.ORG – $199
    ATTORNEYPENNSYLVANIA.COM – $999
    ATTORNEYINFORMATION.NET – $199
    LOSANGELESATTORNEY.ORG – $299
    AUTOACCIDENTATTORNEY.ORG – $299
    JUDGEMENTCOLLECTOR.COM – $299
    TAXLAWPARTNERS.COM – $299
    ESTATELAWPARTNERS.COM – $299
    USLAWPARTNERS.COM – $299
    PERSONALINJURYASSOCIATES.COM – $399
    PROBATEGROUP.COM – $299
    PROBATELITIGATORS.COM – $299
    PROBATELITIGATOR.COM – $299
    AMERICANTAXLAWYER.COM – $299
    ESTATELITIGATORS.COM – $299
    ESTATELITIGATOR.COM – $299
    TAXLAWGROUP.COM – $299
    TAXLAWADVISORS.COM – $299
    TAXLAWADVISOR.COM – $299
    LAGUNALAWOFFICE.COM – $199
    NEWJERSEYATTORNEY.ORG – $299

    And if you buy them in bulk, you’ll get these cherrypicked priced domains (total approx. $10,300). The bulk sale price: $6,500 for all the domains above.

    I’m intrigued to see if El will post this domain sales comment, with the commission included for posting the listing!

    We’ll see if it appears! (thanks El Silver – I haven’t listed all these domains as a group yet anywhere else, but I’ve been selling several of them as cherry picks from $700 – $1900 since 2007.)

    cheers!

    June 28th, 2009 at 7:24 am

      Elliot

      @Stephen

      I’m not a domain broker… I have enough domain names that I could spend the same amount of time to make 100% of the proceeds :)

      June 28th, 2009 at 7:57 am

    dilip

    Price tag and domain quality are keys of success. Thank you for sharing your sales strategies and ‘Straight to the point’ sample email to an end user.

    June 28th, 2009 at 1:28 pm

    Supermance

    “knowing what’s a valuable name and what isn’t valuable” -> this would be great for your next post title :)

    btw there’s one brokenlink on http://www.tobagovacations.com/, on “Find a Restaurant in Tobago”

    June 28th, 2009 at 7:28 pm

    Elliot

    @Supermance

    Fixed the error – thank you!

    June 28th, 2009 at 7:32 pm

    Stephen Douglas

    El,

    I have that same thought when I’m hit with 100 enquiries a month to broker out domains. lol

    I just thought I’d slam those down in a post with you cuz I actually had my database open to them preparing for another submission.

    Sorry for the intrusion – 😉 but thanks for at least mentioning them. Still in for a piece of the action?

    cheers!

    June 28th, 2009 at 9:42 pm

    kfink

    Hey, all –

    I’m just now catching up on old posts.

    Had a quick question about Domain Tax Codes – i.e. the same info that would undoubtedly be available in the Domain Tax Guide, the $79 eBook (which is not within my budget at this time).

    I’m primarily a collector, attempting to gradually shift into selling off my inventory; I’m operating via a DBA under an S-Corp umbrella, and was hoping (configuring as such) that my unsold inventory would NOT be taxed as capital gains, and that I could treat it as an EXPENSE when bought, and a profit/loss when sold.

    Any help or direction as to where I could find these answers would be ridiculously appreciated…(I still plan on buying the guide eventually, but these first answers would really help me).

    Thanks in advance!

    August 5th, 2009 at 9:29 pm

    Elliot

    @kfink

    IMO, you’ll get X answers from X people :) Best advice is to spend the money for the Domain Tax Guide because it will save you money in the long term (or short depending on your revs).

    August 5th, 2009 at 9:31 pm

    stephen Douglas

    @kfink – Dude, probably the best investment you can make starting out in the domain world is first buying the Domain Tax Guide. Click the link on Elliot’s blog for the ebook and start out right. THAT is within your budget, and if it isn’t, you need to restart your business plan.

    August 6th, 2009 at 6:01 am

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